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Meanwhile, Venezuela's bolivar currency fetches nearly five times the official rate on the black market. Venezuela competes with Argentina in the Americas among major nations for the dubious distinction of most troubled economy. In both nations, currency controls and a deepening U.S. dollar shortage are widely blamed for economic turmoil. Venezuela's government has since October been steadily reducing the amount of dollars available to businesses without explanation. That has starved companies for raw materials and imports, forcing production cutbacks and triggering shortages. In February, their predicament worsened as a system disappeared that allowed businesses and investors to obtain dollars by purchasing government debt. An economist at Andres Bello University, Ronald Balza, said he doesn't see how rationing certain foodstuffs can address the true cause of shortages. "The reason for shortages (in Zulia) is the same as it is in the rest of the country: fixed prices, supply problems and the preventative purchases that consumers make every time new (higher) prices are coming." The Venezuelan Central Bank's shortage index in April was 21.3 percent -- the portion of a basket of more than 100 items sought on store shelves but unavailable. That's the highest it's been since the bank began publishing it in 2009. At the same time, some economists say Venezuela is heading into a recession. The Central Bank said the economy grew just 0.7 percent in the first quarter. Finance Minister Nelson Merentes said last week that he would travel to the United States and Europe to seek investment to try to shore up a deficit of dollars. He did not disclose the size of the deficit.
The bulk of Venezuela's $26 billion in international reserves as of May 10 were in gold and other monetary instruments with less than $3 billion in cash available, according to analyst estimates. Opposition economists accuse Chavez of looting the treasury in order to spread largesse and win re-election last October. After Chavez's death from cancer in March, Maduro won a special presidential election by a margin of just 1.5 percent.
[Associated
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